Home     Forum     401k     401k Rollovers     Crypto Forum
    Register   Login   Members   Search   FAQs     Recent Posts    



Is it worth the investment?

Reply to topic
Money Talk > Real Estate

Author Thread
jhauglid34
First Time Poster


Cash: $ 0.25

Posts: 1
Joined: 22 May 2013
Location: minnesota
Is it worth the investment?  Reply with quote  

I am going through a deboccle at the moment. I am trying to think if it is worth the investment to look into getting a home and or townhome to own. First, I want to make sure that I am not wasting any money and I also wouldn't want to pay a ton for a monthly mortgage. I am not by any means looking for a huge house, just something that is comfortable to live in. I need to know peoples thoughts on this, and it would greatly be appreciated. Is purchasing a house worth the investment? How much on average do individuals pay for a mortgage? I know these are all things I could ask a Real Estate Agent but I am just curious. Thank you!

Jeremy
Post Wed May 22, 2013 11:10 pm
 View user's profile Send private message
blixet
Preferred Member


Cash: $ 32.55

Posts: 156
Joined: 28 Apr 2013
Location: Southern California
 Reply with quote  

I don't think of a personal residence as an investment. If you buy in a good location and get a good price on both ends, you'd be lucky to keep up with inflation after 30 years, all things considered. Interest, taxes, insurance, maintenance and repairs, etc. At least this has been my experience. Is that better than giving your money to a landlord? For you to decide. Presumably, you have to live somewhere.

As far as mortgage payments go, it really depends on the particulars: principal, rate, term are the biggies.

For example, if you purchase a $200,000 home, put 20% down and get a 30 year fixed mortgage at 3.75% ignoring other costs, you'd be looking at a monthly payment of around $740 per month. YMMV

Information is more valuable sold than used – Fischer Black
Post Wed May 22, 2013 11:39 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 751.85

Posts: 3656
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
I am trying to think if it is worth the investment to look into getting a home and or townhome to own.


The biggest factor is the length of time that you plan to own it.

1. In general, if you may move within 5 years, you need the flexilbility of a rental. The cost of buying/selling a property will eat up any potential savings.

2. But if you plan to live there for 10, 20, 30 years - then the investment of owning is worth it. The house appreciates, grows in value, but the mortgage remains fixed for 30 yrs (unlike rent that will be increased every few years). And eventually, the house is paid for and you live 'rent free'.

Be careful to compare apples to apples - ie, compare a 800 foot apartment to an 800 foot townhome, not to a 2500 foot 2-story house. That will give you wrong answers.

I have owned several houses for over 25 years (rental houses), mostr have increaed in value by 3X, some by as much as 6X - so yes, for me, it has definitely been 'worth it'.
Post Thu May 23, 2013 12:55 am
 View user's profile Send private message
Brownsfan2k5
Full Member


Cash: $ 20.90

Posts: 93
Joined: 27 Feb 2013
Location: Military
 Reply with quote  

Old guy:

You always talk about how you refinanced your rental homes every few years when you had enough equity. What about when the intrest rates were around 7-8%? Have you always been able to come out ahead? Just cuerious.
Post Wed Jun 05, 2013 1:39 pm
 View user's profile Send private message
Brownsfan2k5
Full Member


Cash: $ 20.90

Posts: 93
Joined: 27 Feb 2013
Location: Military
 Reply with quote  

curious*
Post Wed Jun 05, 2013 9:08 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 751.85

Posts: 3656
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
What about when the intrest rates were around 7-8%? Have you always been able to come out ahead?


Yes - actually it was easy then, the SP500 Index was growing at 17%/yr. Ie, I borrowed at 8.5% to 9% and invested at 17%/yr. There was an 18 year period of 17%/yr (1981 to 1999). The differences of rates is the key - 17-9 =8%, that is better than 11-4=7%.

http://politicalcalculations.blogspot.com/2006/12/sp-500-at-your-fingertips.html
Post Wed Jun 05, 2013 10:56 pm
 View user's profile Send private message

Goto page 1, 2  Next
Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      


Money Talk © 2003-2022

Crypto Prices